Social Innovation and Product Development 2.0

I heard GM CEO Fritz Henderson say earlier this week that General Motors could no longer afford to launch a handful of successful cars each year, rather each car launch must be successful. Got me thinking – how might GM pull this off? How will they know what kind of car to launch? What do consumers want? Will traditional mass market approaches work under this constraint?

My guess is no. GM will have to find a new way to bring product to market. A method that captures the wishes of its customers, iterates with them, and builds a loyalty base. This challenge begs for a social innovation process that over time, fosters relationships between GM and its customers through the product development process. What should the wheels look like? How can I customize my car beyond paint and trim? GM needs to let customers cut and shape metal with its designers and engineers.

Technology companies, like IBM, have been exploring this new product development 2.0 model. Using a social medium, like a blog, IBM shares its ideas with lead users ahead of beta testing. This interaction allows the beta to be better informed and accepted by users. Loyalty and adoption increase as well, after all the users are creators and have skin in the game. This model is improves IBM’s rate of success.

Threadless employs a social model too. Users upload their tee shirt designs and the community votes on their favorites. Threadless then only produces the top tee shirt designs, cutting their inventory to zero. They sell what the community wants and not what they don’t want.

More and more companies are embracing social innovation because it eliminates some of the waste involved with traditional go-to-market strategies. Waste like inventories, launch costs, and product failures. I love this recent quote from Chris Bruzzo about their social marketing strategy:

social media is the difference between launching with millions of dollars versus millions of fans. – Chris Bruzzo, VP Starbucks